One of our key non-generic development products is Rexista™, an abuse- and alcohol-resistant, controlled-release oral oxycodone formulation. This product is covered by pending patent applications. Rexista™ is a unique dosage form, designed to be resistant to well-documented abuse that is experienced with current oxycodone products. This includes abuse by injection when combined with solvents and by nasal inhalation when crushed or powdered. Rexista™ is also designed to resist release of the entire dose when consumed with alcohol, a significant problem with some opioid drugs, such as hydromorphone. According to Healthcare Analytics, OxyContin® (oxycodone hydrochloride controlled-release tablets) had estimated U.S. sales of approximately US$2.4 billion for the 12 months ending December 2012. OxyContin® currently represents 99% of the US$2.5 billion oxycodone sustained-release market.

"Opioid painkillers are modern medicinal miracles, but they can also lead to devastating addiction. Abuse and diversion of oxycodone based drugs is a serious issue that faces medical doctors and treatment programs alike." (source: http://www.oxycontinabuse.com)

Rexista™ has been subjected to rigorous in-vitro dissolution testing and has met its design criteria for release pattern including in the presence of alcohol. Based on these initial results, Rexista™ is expected to be effective for once-a-day dosing in the management of pain. It is also expected that it will resist abuse by oral, nasal or intravenous administration and resist unintended total dose release in the presence of alcohol.

Our initial pilot clinical trial of Rexista™ was designed to compare the pharmacokinetic characteristics of our oxycodone product, in a once-a-day 40mg dosage format, with a currently marketed branded oxycodone product, Purdue Pharma's OxyContin®, in a twice-a-day 20mg dosage format, under fasted conditions.

The bioavailability of a single dose of the Rexista™ product, as measured by Cmax and AUC, was comparable to that of two doses of OxyContin® dosed at 12 hour intervals. Both Cmax and AUC were in the 80% - 125% range as compared to OxyContin®, demonstrating effective bioequivalence with the branded product.

Due to the growing abuse associated with certain painkillers, in April 2011, the FDA announced the requirement of an Opioids Risk Evaluation and Mitigation Strategy (REMS) as part of a broader action plan to address the national prescription drug abuse epidemic in the U.S.

On July 9, 2012 the FDA approved a Risk Evaluation and Mitigation Strategy (REMS) for extended-release and long-acting opioids. The REMS is part of a federal initiative to address the prescription drug abuse, misuse, and overdose epidemic. The REMS plan is driving current R&D efforts and may ultimately drive prescribing of newer tamper-resistant extended-release opioids. We believe that the FDA's move to restrict prescribing of extended-release opioid analgesics should benefit tamper-resistant formulations such as Rexista™.